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Ben's Border Café is considering a project which will produce sales of $16,000 and increase cash...

Ben's Border Café is considering a project which will produce sales of $16,000 and increase cash expenses by $10,000. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. What is the amount of the operating cash flow using the top-down approach?

$6,000

$7,500

$4,000

$4,500
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Answer #1

Operating cash flow = 16,000-10,000-(24500-23000)

Operating cash flow = 4500

The answer is d.. $4500

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